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Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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01:01:00

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U.s. 12, S&p 12, Ford 9, Us 6, America 5, Lauren Bacall 4, China 4, Pillsbury 4, Heinz 3, Africa 3, Washington 3, Rick Santelli 3, Carl Icahn 3, Alzheimer 's 3, Marilyn Monroe 2, Kayla 2, Morgan Stanley 2, Goldman Sachs 2, Phil Lebeau 2, Ty 2,
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  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    October 28, 2013
    1:00 - 2:00pm EDT  

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. all right. let's do final trades. around the horn, dr. j? >> pepsi buying upside calls. >> steve? >> a -- >> i like ford. >> you won the debate. >> thank you. >> anthony. >> buy morgan stanley. >> see you tomorrow. >> halftime is over. >> "power lunch" and the second half of the trading day starts right now. >> all right. folks, pick a basket, stocks in a basket. we're looking at four big areas where many investors are putting their money right now. the big caps, the s&p 500, the small caps, tech stocks, what is best for you. we'll take a look at that consumer reports out with a reliability story and ford is falling. big time. where does your car stand or your brand stand? we'll tell you in two minutes. and legal briefs too. two huge stories in the world of law, one involves a merger that could mean hundreds of legal --
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my goodness, legal briefs, hundreds of layoffs, not sure i will get through this. a memo that has everybody talking about the place of young women in the business world and how they should dress and act. first to sue at the nyse. >> my, my, my. stocks having a so-so day but we're at or near record levels for several indices, close to dow 16,000 than 15,000. the nasdaq 65 points from 4,000. where is the retail investor in all of this? mary thompson found out. >> hey, sue. data suggest the retail investor remains cautious with the markets at record highs. outflows continue while trading activity at discount brokerages is modest. investors began pulling money out of stock funds in may of 2011. since then, u.s. equity funds have seen net monthly outflows in 25 of the last 28 months through august. the september numbers aren't final but weekly figures suggest
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the exodus continued in the two weeks out of the three recorded so far for october. so recent data from discount brokerages suggest some re-engagement of the retail investor. charles schwab and e-trade seeing increases in average daily trades by their clients from last year's third quarter to this one. quarter over quarter basis both were down. in a recent interview with cnbc morgan stanley ceo james gorman who runs one of the largest retail brokerages in the country said his clients aren't running away but they're not jumping? >> retail investors haven't pulled money out of the market. they have been less active but haven't pulled it out. it's poised for growth. >> conventional wisdom would say if the retail investor does join the party it may be a sign the party is winding down. not the case now, back to you. >> not now but we will see. mary, thank you very much. dominic chu fora market flas. >> netflix off its lows after it
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and cbs announced a licensing agreement in which "dexter" will become available for netflix in the u.s., the first four seasons available on halloween and the last four seasons later on in january. netflix is one of the ugly duckling stocks that went from being battered and bruised to flying high again. three more names in the next half hour of "power lunch." stay tuned. but netflix still off its lows of the session. back to you. >> thanks so much, dom. appreciate it. see you in a minute. what is the best bet for the retail investor right now? the four main indices and the etfs that track them. the dow jones up 19 points, people can play it with dia. as for the s&p 500, the last trade on the broader based index is up 4 points on the trading session. the spy is the ticker for the etf tracking the s&p 500. as for the nasdaq, right now the nasdaq is traded up about 1.5 points. the triple qs, qqq, follow the
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nasdaq 100. right now it's up a tenth of a percent. the russell 2,000 perhaps the broadest based in ddizz dis sdia lot follow is down. good way to play the russell 2,000 the etf ticker iwm. they both join me. welcome, gentlemen. >> thank you. >> jj, what are you hearing from your clients as we get stellar performances like the small caps that have had a better year than some of the mid caps have? >> a actually of two cities. on the one hand your 401(k) investors who haven't been in and jumping on board. that's what you see mary reported. flip side, clients who have had 50, 60, 70% of money in stocks, up 25, 30, 35%. they're like maybe it's time to take some money off the table. >> all right. i'm going to go to rick santelli and then get to you. rick santelli we have a two-year note auction to start out the week. how does it look? >> it's $32 billion two years
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and we haven't had an auction of that size since august 08, smaller one since july of '08, the grade b. yield at auction 3.23, little lower yield that we were looking at which was 33 basis points bid offered at 32.5. smack on the ten auction average look at indirects at 29 and directs 32 they were better. i have to tell you, not very volatile. we're not looking at a lot of movement in the treasury complex before the two-day meeting. sue, it's all yours. >> thank you so much, ricky. back to kenny polcari. jj saying a tale of two markets. you've seen that to a certain extent as well. >> we have. overall the retail investor has to be somebody who has the plan, right. working with his planner, a much broader plan. the retail investor should not be someone that's just jumping in and out because for them that's a losing proposition, not what they do every day of their life. they're not traders that are in
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and out. >> the ability to time the market is so -- >> it's very difficult and it's just a losing strategy for most people. people have to stick to the plan. now, like we were discussing off camera, stocks that have moved and we've said it before, stocks that have moved have done very well that investors should take some money off and plow it back to stocks that have underperformed that you view will do well in the coming year. >> to jump on board, the areas that haven't done well like emerging markets looking at asia-pacific region, the uk. >> talk about that in a few minutes. >> you're looking at 13, 14 times earnings. you're pushing the higher limits here in america with 16, 17 looking at the multiples going back. >> and with the fed not going anywhere some of the plays in the emerging markets might work out, right. >> they get nervous when the fed starts to pull back. fed is not going anywhere until match. >> little money in. >> the problem for a lot of investors jj is not only the reach for yield but income. people who want income haven't been that many places to go.
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still doing dividend paying stocks. >> we're not as much because you're seeing yields in other governments that are near 4.5 and 5% and the problem you have when doing dividend plays only looking at one area which core late to the u.s. stock markets. natural limited partnerships with oil and gas and transportation are out of the correlation of the markets and those areas are yielding 5 and 6 %. >> that's right. that's true, but people that still want income but still want to be in the market, i think dividends are the way to go. >> but again -- >> you need both. >> to your point getting diversified, working with your planner to make sure you have everything covered. >> the planner is key. >> absolutely. and we just found out that kenny and jj burns, are both master cooks. who knew. >> all right. >> i still -- i think there's some sort of a network show in this somewhere. >> absolutely. >> ty, up to you. >> thanks, guys. just a few minutes ago, consumer reports released its rankings of auto reliability. phil lebeau in chicago with the
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results. >> these rankings are interesting because it's based on 1.1 million people who answered the survey, new car buyers, so it's what people are actually seeing in terms of what they're driving. here are the top five brands when it comes to auto reliability according to consumer reports. you see lexus number one, followed by toyota, acura, audi a big jump to number four, struggled for years, this year up to number four and mazda. who did the worst out of 28 brands that were ranked by consumer reports, these were the five poorest performing. start with mini at 28 and then the two ford brands, lincoln and ford at 27 and 26, followed by cadillac and dodge. across the board, not a good report for the big three when it comes to auto reliability. overall, what's the problem? here's consumer reports explaining what the main issue is. >> what's going on is we're seeing different problems. so when it comes to major mechanical problems, engine, transmission, et cetera, they are doing better. but the new electronic problems
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are actually bringing them down. >> and this what is we see year after year, tyler. you have these problems when it comes to electronics, the new systems, two steps forward and a step back, one step forward and two steps back and that's what we're seeing with the latest report. >> cars may be getting too complicated for their own good i guess is the bottom line here. how or specifically why did ford fall as much as it did? >> well they've got a couple issues there and the company just put out a statement, a lot of them resolve around the info tainment, my ford touch, ford saying we listen to all customers input and remain committed to delivering the best quality with every new vehicle, improved the quality of our advance technologies by 50% since launch. customers want advanced info tainment technologies in their vehicle, my ford touch and sync are sold on 93% of our vehicles and more than 70% of customers would recommend the technologies
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to others. but they still have problems there. the other thing to keep in mind is that two-thirds, two-thirds of the fords and lincolns in this vasurvey, rated below avere when it comes to reliability. only one, the f series, that's the only one that did well. and keep in mind, improving quality, that's been a hallmark for ceo alan mulally since 2006. for a while they were making strides but this latest report is not a good one. the stock by the way up 110% since alan mulally became ceo in 2006. >> probably uncomfortable day around ford. what is the main problem for the carmakers when it comes to complaints and also finding out some additional news on models big models on that do not buy list? >> overall, the problem remains electronics. infotainment systems not performing. the big news out a few minutes ago, consumer reports is no longer recommending people buy the toyota camry, pries you v,
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rav4, accord v 6 and al my ta. these are among the most popular vehicles in the united states and consumer reports saying we're not recommending them. the toyota models because of how poorly they performed in iihs crash tests and with the other two it's because they did so poorly in the survey that consumer reports is saying we can't recommend them. >> that's really amazing because i thought they had rated the altima within the past couple years as their choice in the sort of mid--priced sedan mark. >> listen, a lot of things are changing and what you're seeing with these reports is that there's a premium in terms of the bar is raised for quality and in some of these cases, it's clear that it's not -- they're not keeping up with the -- what's expected out there in terms of reliability. >> phil, thank you very much. phil lebeau reporting alarming numbers on auto reliability. >> absolutely. to the health of housing or perhaps not so healthy housing.
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some weak data out today. the number of americans who signed contracts to buy a previouslied only home, falling sharply in september for the fourth straight month down 5.9%, biggest drop in almost a year. holding back due to higher interest rates and uncertainty in washington. one of the country's biggest mortgage lenders speaking with cnbc about what impact jpmorgan's mortgage settlement might have on wells fargo. diana olick is at that conference in washington and so is she. >> hi, sue. that's right. the president of wells fargo home mortgage didn't exactly want to talk about the deal. he said that the four other banks as well as wells fargo have done plenty to rectify the ills of the past, especially involving the national mortgage settlement and as per the jpmorgan deal he said he would prefer to look to the future than to the past. >> unfortunately, i guess the jpm situation, there's matters from the past, some arguments from the past, that still have
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to be resolved. i think more important is to continue just like we're doing, continue to focus forward. to continue to try to move policymakers toward the unfinished business of gse reform so we can move forward and take care of, you know, the future housing finance system in america. i think that's more important than arguing about the past. >> in addition to continued litigation, the big banks are also facing a big drop in origination volume. now jpmorgan and wells fargo and others have laid off a lot of workers. i asked mr. heid if he expected wells fargo to lay off more workers in the origination area, he could not rule it out, they would continue to look the at where things look next year. we expect mortgage rates to rise next year which would take away from refinance volume. back to you. >> thank you very much. will there be any blow back from europe and beyond over the nasdaq spying revelations?
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that's coming back. coming up after the break. could american businesses be hurt? reputationally because of this. two big problems for obama care and another big website problem and a new round of sticker shock. after this short break. .
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welcome back to "power lunch." ten neco moving higher after reporting its third quarter adjusted profits and sales meet estimates. it's an auto parts maker in
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illinois, did have a $59 million restructuring expense in the quarter, shares at session highs. back to you. >> thank you very much. germany buzzing over the nasdaq scandal amid accusations the u.s. spy agency has been tapping in to angela merkel's phone since 2002. the front page of der speigel says it all. the nest pointing to the u.s. embassy in berlin. the nasdaq denying german reports that president obama was told about the tapping of miss merkel's phone three years ago. spain has called the u.s. ambassador in madrid to talk about charges the u.s. has been spying on spanish citizens. the big question that we're going to try to answer over the next few days is will this hurt u.s. businesses overseas? will there be a rift or a lack of trust if you will? we'll try to answer these questions in the next few days for you. shares of merck moving lower today, last trade is down 2.5%. the company reporting better than expected third quarter earnings, though revenue fell
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below street estimates because of lower sales of its again new via diabetes drug, adding evidence its biggest product was losing ground. bristol-myers squibb moving higher by better than 6%. morgan stanley upgrading that stock following friday's data on its newest cancer drug to treat lung cancer. ty, to you. >> a data center critical to healthcare.gov went down holding on-line enrollment in all 50 states. this is just the latest in the series of messups that have plagued or crippled website over the weekend. just the weekend. our bertha coombs and cnbc health care reporter dan mangen have been following the story. >> basically verizon's unit hosts the data hub, the part that everybody says it works great, the part that collects all of the pieces about your information, connects with irs, with homeland security, to authenticate who you are.
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the hosting part went down for about 20 hours over the weekend and it's not clear why that happened and why it took so long to come back. talking to data folks they were saying it doesn't make sense you wouldn't have what they call a fail over, trip over to another server that would kick in within a few minutes. it shouldn't take a full day. >> did you see "saturday night live" the woman who did kathleen sebelius and she was so proud they had three likes on facebook for the website. dan, one of the other things that i think a lot of people are finding is that there's sticker shock here. not only did washington state, we found out last week, have to tell people that the subsidies they thought they were going to get were miscalculated, they were going to pay more, but as people go into these programs, they are finding that because some of these insurance plans cover more, they cost more than the plans you might have been getting before? >> yeah. eye opening for a lot of people. if you just listen to the rhetoric out of the administration you would think it's not going to cost you a lec of a lot of money and the
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federal data hub issued this week compounded that. people aren't aware of how much offsets they can get but a lot of people will pay more or pay something they weren't obligated to pay before hand. they will be surprised. >> $100 a month or $50 for a lot of people, that is a -- >> sure. >> real difference maker. >> this is also impacting the people who were already buying insurance. 19 million people in the individual market, these were people paying lots. some of them may qualify for subsidies but without the subsidies that's still -- >> if you don't get the subsidy you will pay a lot more out of pocket. it's a very -- as we were saying a month ago a lot has to go right and doesn't seem like a lot. >> a lesson for young ladies apparently. what to do and perhaps more importantly what not to do at work. it all comes from a very controversial memo.
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think lauren bacall and not marilyn monroe. you heard me right. we have that next. and a big day in the news corp phone hacking scandal. kayla has it all for us. >> more than two years after the phone hacking scandal reached a fervor pitch, executives are in the hot seat on criminal charges. we'll tell you what it could cost the company here at home. that story up next. flf flfr i love having a free checked bag with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles
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i'd like that. a new way to bank. a better way to save. ally bank. your money needs an ally. all right. in a rising market today we have the s&p 500 at a new record high. the market right now shows the s&p up about a quarter of a percent year to date, it has been exceptionally strong market as we've been telling you all along. the s&p is up almost 24%. last trade there at 1763.43. ty, the market keeps marching higher. >> key players in news corp's phone hacking scand really in court today and kayla tausche is here now with more. kayla? >> ty, a trial that's been two years in the making but today eight defendants including former news corp executive rebekah brooks, her husband and prime minister david cameron's former press chief andy colson appeared in a london court for a first day of a month's long trial over allegations they
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hacked phones, bribed officials and averted justice. all have entered not guilty pleas and while the details have largely been uncovered the trial could bring fresh costs for the new news corp which split off from its ultraprofitable tv division this summer. the larger 21st century fox agreed to compensate the newspaper company for legal fees or civil settlements it incurred since 2010. the company has paid about $330 million in such fees. here's the issue, though. criminal liability isn't covered and analysts at evercorp says that risk is nearly impossible to quantify. the company disclosed in september that the outcome of these proceedings, quote, any fine or other penalties associated with any plea, judgment or similar result, could hurt the new company's reputation and their bottom line. this would be a new issue for them. >> fascinating stuff. this trial will go on for months, apparently. >> according to the "the guardian" at the forefront of the come, it could last until easter. grab your popcon. >> kayla, thanks very much.
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send it to dominic chu for a market flash. >> popcorn for you, t roe price at session highs, ubs upgraded to a buy from neutral based on stabilizing outflows relative valuation. basically means the mutual fund business is doing ben tter. raised from 90 to 77. >> the law firm orric herrington a merger would create the top ten largest firms. an announcement as soon as next week. elle and stacy are with the website above the law.com. it's good to see you again, guys, as always. welcome. >> thanks for having us. >> let's start with the merger of these two firms. does that mean that we are going to see basically massive lay jufoffs? >> i think there's a possibility. a lot of overlap between the two firms merging orric and
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pillsbury. pillsbury has been a sick person, like e harmoharmony the guy that wants a date but hasn't gotten within. they have a lot of overlap in offices in california. could see redundancies there. >> you made the point in one of your articles that pillsbury has been on the block for a while. we've seen some of the large firms try to consolidate, some successfully, some not so. >> last february, i think they were already trying to get with another firm or hook up with another firm, but that firm just merged with a different firm so you have to wonder what's going on underneath the covers at pillsbury for lack of a better term. >> underneath the covers and talking about law firms which is a very dry subject usually but not with you two. what does it mean for fees. less competition in a way but two massive firms that have a global presence? >> i would imagine that it's -- i mean they're trying to keep in
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line with global competition and the prices keep getting a little bit lower. they keep trying to make it so that people actually want to spend money with these law firms. so i think they might get a little bit lower, just as the market ajusts for this merger. >> one of the interesting things we've seen in 2013 calendar year, more mergers for law firms than any year since 2008. so what we're having right now is a consolidation of the legal market because for law firms trying to offer themselves to clients as a kind of a one stop shop for all of their legal need in this competitive marketplace. while it's bad for lawyers, i think that this could show that some downward pressure on price. >> good for corporations who use them. all right. on to topic number two which i got to say raised my eyebrows. other legal news for you now, a sexist memo out to female associates at the u.s. offices of clifford chance. the memo was entitled "presentation tips for women." is it chalk full of some tips
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which i think are quite legitimate and other tips that are kind of ridiculous. including the quote, think lauren bacall, not marilyn monroe. in essence, this was -- these were tips that were sent out about how women should dress appropriately in the work force. the fact that they shouldn't say, um, a lot or yet, like, things like that, but went to don't show a lot of cleavage. stacy, i found some of them offensive because men are guilty of doing some things with language as well. i mean did you find it sexist? i did. >> i did because why is a memo like this specifically geared towards women. >> we should note it came from the women's committee as well which is a very important point. >> when i wrote about this i called this women on women crime because these women have gone through law school, passed the bar exam, working at a big-time law firm. you would think that they know already that when you're sitting at in a skirt you should cross
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your legs. are men not immune to saying like, um, oh, my god. >> we are. >> that's good then. the segment is over. >> no. look, obviously the memo is ridiculous but it's important, your point you brought up, about how this is women on women violence. that's an important point. the way i look at this, it's about kind of older women, right, women who kind of came up in the mad men era where these things were so -- they were getting hit for these kind of things now talking to younger generation, even the quote, we pulled the lauren bacall, what does lauren bacall mean to a 25-year-old first year associate. she might have said think goodie proctor not hester prynne. that's how dated this memo was. >> like a mentoring, maybe aimed at mentoring them to do the politically correct things in the office? >> to me that's the other problem, though, not just with this firm but with large firms, large corporations in general. if you're going to mentor you need to mentor one on one.
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that -- some of those tips work one way when you're kind of talking over lunch or talking over a shared event, you know, older established women to younger women coming up. not some 300 point memo that you senders and the office. that's not mentoring. that's covering your backside what is it is. >> except for the language and some of it perhaps not. thank you very much. appreciate it. ty, over to you. >> thanks, folks. gold prices closing. take a look at where the metal traded today and you see it up just a little tiny fraction at 1352 and some change. basically right where it began trading earlier today. all right. jc penny told investors that sales trends were improving and reaffirmed its forecast of a rise in same-store sales in the third quarter. mosaic will buy cf industries phosphate business for 1.2 billion in cash. they will supply mosaic with a million tons of ammonia used in
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makes fos cate fates and facebook falling below $50 a share, although back up just a bit, ahead of its earnings call on wednesday. all things d reporting that facebook has decided not to launch video adds this year. it's trading at 50.63. to the bond market, rick santelli, who has been tracking the action out at the cme. hi, rick. >> hi, tyler. if one of the fed's secret goals was to take volatility out of every market except for going up in stocks, mission accomplished. look at it, we have two-year note auction today. wasn't a bad auction. two-day chart, two-year note yields within a three quarters of basis point range. go to the longest end of the curve where the volatility is, 30-year bond, two-day chart, three basis point range low to high. look overseas, look at the boom. three basis point range over the last two days. dollar index, .3 of a cent
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range. want to see what's going on think quantitative easing and other issues. year-to-date chart small range but at the bottom all the way back towards february. back to you. >> rick, thank you very much. the dow and s&p, sitting at record highs or near them. other markets around the world, also at fresh highs. mark mobius tells us where he's seeing great opportunities to make money now. plus, we'll tell you about ugly duckling stocks that could turn into swans. and carl icahn made a killing buying netflix when it was battered and selling near record highs. we've got those three that are looking ugly right now but could start to look pretty some time. we'll be right back. ♪ [ male announcer ] staying warm and dry has never been our priority. our priority is, was and always will be serving you, the american people.
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lunch." shares of bloackrock have room o keep climbing. bairns is reporting the firm stock has been up 65% over the same time a year ago. still the financial newspaper said blackrock shares could rise
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further another possibly 15%. the reason is a healthy mix of funds, strong cash flows and a good management team. sue, back over to you. >> you can't beat that combination. thanks very much. emerging markets have underperformed the s&p 500 this year, but with the s&p having already surged more than 20%, little bit better than that actually, it may be time to take another look at the beaten down stocks in that area, especially in the merging market small caps. joining us with a rare interview, we're pleased to welcome back mark, executive chairman of the templeton emerging markets group. welcome back to "power lunch." >> thank you. >> you know, before i turn you to the emerging markets, can you weigh in on what's happening here in the u.s. with the s&p moments ago hitting a new high? we have spectacular gains for the small cap stocks. do we go higher here in the united states or are we close to the end of the run? >> my guess is that we're going to go higher. i think the bull run is going to continue for quite some time and, of course, that's great for
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emerging markets because as the water rises, all the boats will be rising as well. >> you make the point that the emerging markets in your book still are the main economic driver of the world. what areas of the world do you like the best at this point? >> right now, of course, asia is where the action is. not only china, but korea, taiwan, thailand, malaysia, singapore, indonesia, you name it. all of these countries are doing very well. >> now you spend a lot of your time traveling around the globe. as a matter of fact, most of your time traveling around the globe. can you weigh in on the growth debate that's now occurring around china and has been for the last year or so from your vantage point when you're on the ground there, have they managed to engineer an economic recovery and slowed things down to the point where it's more sustainable than some are worried about? >> well, you must remember that in percentage terms, there is a
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decelerati deceleration, but that car is still moving ahead at a very rapid rate. because if you look at dollar value ten years ago, it was double-digit growth. the amount of dollars was much smaller adding to the economy. now, you're growing at 7%, and the dollar value is very, very high. so i see tremendous growth and i don't see the slowdown. i really don't. when i visit various cities and companies in china. >> so how does the average investor, the retail investor at home play the markets you're suggesting? what's the best way for them to put their money to work? >> well, first of all you have to remember at least 30% of the global market capitalization is emerging markets. therefore they've got to look at 35% of tare portfolio in emerging markets. then don't forget frontier. i forget to mention africa is very exciting now. 3 to 4% in frontier markets as
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well because they're growing faster than emerging markets generally. >> you have a frontier markets fund but if people are not able to get into that, and you want to play in africa for the retail investor sometimes it's daunting, confusing. would you recommend are there etfes that can do that or better to buy say multinational corporations that are investing in africas themselves? >> you can try all of those, but the best approach is to get a diversified frontier markets fund that has an africa exposure. usually the frontier fund will have at least 30% in africa, and then, of course, there are dedicated africa funds, we have one. >> how much is being fueled, the growth in all of these areas, is being fueled by the fact that u.s. federal reserve is -- has remained accommodative so our economy has steadied out and starting to grow incrementally and a lot of people say that's what has now added to the growth
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that we're seeing in some of these emerging markets? do you agree or not? >> i agree, it's helped, but remember it's not only the u.s. that's been increasing their money supply. it's china. it's europe. it's japan and spain. don't forget liquidity is growing globally not only from the u.s. >> do you like japan at this point? mr. abe has had more success than his predecessors in turg around that ship? >> i love japan but why you have to show the currency. you buy the stocks and short at the currency. >> we'll let you go. thanks a million for spending time with us. we appreciate it. good to see you again. >> thank you. >> mark mow beas. in today's yahoo! finance question of the day, stocks are at or near record highs, small caps beating the big caps. what do you think is your best move right now? 18% of you say investing in dow stocks, 27% say investing in s&p stocks, 9% say investing in the
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nasdaq 100, 20% say investing in small caps with 26% say cash or bonds. interesting breakdown, ty. >> interesting breakdown. your conversation with mow beaswas fascinating. what a guy he is. >> yes. >> ageless. >> he really is. >> ageless, and spends his entire life on an airplane. he really does. >> that would put years on you, in addition to miles. >> it would on me. >> question millions are struggling with in this tepid economy, should you pay down your debt or fund your 401(k) retirement plan? the choice lots are making. a new study may give researchers a weapon in the fight against alzheimer's. plus, big news in fast food. mcdonald's de-emphasizing heinz ketchup, hold the heinz on its men knew. who will the burger giant go with now. "power lunch" will have the
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great american ketchup taste test coming up. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. stick with innovation. stick with power. stick with technology. get the flexcare platinum. new from philips sonicare. i have a big meeting when we land, but i am so stuffed up, i can't rest. [ male announcer ] nyquil cold and flu liquid gels don't unstuff your nose. they don't? alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ]
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a new study out. researchers at tel aviv university have discovered a biological mechanism that may show how challenging mental and physical activity delays the onset of alzheimer's. the head researcher say based on this study it is once again clear advanced mental and physical activities keep alzheimer's at bay but the question and it's a big one how it does that and why. ty, up to you. >> thank you very much. paying down debt or funding your retirement? what are most americans more focused on right now? sharon epperson doing some digging into this. i'm curious what people are doing and why. >> you're going to be surprised. it seems like a lot of money, american workers stash over $300 billion in 401(k) plans every year and that includes employers matching contributions. but it may not be enough because the majority of americans with
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401(k) or other employer sponsored retirement accounts are accumulating debt faster than they're saving for retirement. now according to a report from hello wallet money that retirement plan participants spent to pay down debt rose nearly 70% in the past 20 years. and what's really worrisome is the problem is most pronounced for those closest to retirement, 401(k) savers between 50 and 65 years old spend an average of 22% of their income paying down debt in 2010 up from 13% in 1992. and the result of this is that older workers only have about two years of retirement income saved. that's only a slight improvement over the past two decades. but americans are living longer today and they're going to need about 17 years worth of retirement income. what do you do to make sure you can retire and not outlive your money? of course increasing your retirement savings contributions is an important step in building assets but cheryl garret says it's crucial to look at other side of the ledger as well, review your debts to determine
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your net worth and focus on cash flow which may mean you have to reduce expenses. for more on your retirement you can logon to cnbc.com. sue? >> thanks, sharon. buy low, sell high, worked like a charm for carl icahn and his netflix take. dominic chu is back looking at three other beaten and abandoned stocks that could be set to take off. dom? >> you never know who is going to be the net netflix but one stock that could be a candidate $50 it's down 16% over the last quarter, but could it be due for an upside breakout? more details on what this stock is next after the break. keep it right here on cnbc.
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billionaire carl icahn made a 400% return in just 13 months on his netflix investment being the stock when most were heading for the doors. dominic chu has three other stocks and he's been looking at that could go from ugly duckling to swan. >> here's the thing, we don't know exact what's going to happen, nobody can read the future but money managers look at factors, things in combination that can pick the right stock. one of the things they look at is price to sales which we looked at and another thing is what's the momentum. so here's an interesting one because we showed you this before the break. a $50 stock. here's the interesting part. this stock right now, has a price to sales ratio of 2.8. >> is that low? >> that's low. >> it is below average, right. >> ps, i love you.
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>> this stock is one that's tried to change its brand image a little bit. don't want to be about handbags, they want to be about a lifestyle brand. >> i know what this is. >> it's coach. >> it is coach because this stock has been beaten down and maybe trying to move back up again. here's another one for you. this is an interesting one because this stock is a $37 stock, trades at just 70 cents in stock price for every dollar of sales. this company is one that's interesting as well because what it's trying to do is it's critical in terms of the fourth quarter teen retail season. think hard. teen retail. >> abercrombie. >> it is abercrombie & fitch right there, down 25% over the last -- >> i love this. >> due for a breakout. finish off with another one, interesting as well because $50 stock down 20% just over the course of the past year. 2013. trades at $1.60 for every dollar of sales and it's on-line travel competitive but not priceline. it's -- >> got to be expedia.
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>> it is expedia. it's expedia. this stock has been one that's beaten down, may be due for an upside break. just some factors some money managers are looking at. >> thanks very much. where are we going in down to sue. >> talking ketchup, ty, ketchup. mcdonald's dumping heinz from its menu over a beef with rival burger king. what will we dunk our fries into now? "power lunch" has the great ketchup taste test. the power rundown is next. americans take care of business. they always have. they always will.
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the teleprom ter has gone down but that's okay because we don't care about that. what we care about we have three topics to spend a little time on because we want to get to the condiments, to the ketchup. first talk about goldman sachs.
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goldman sachs a big charitable giver but lately, folks, they have begun taking credit for some of the gifts they've been making where here-to-for they have been shy about -- >> anonymous. >> in many cases or in real mouse type in others. what does this say? do we care? >> i don't even think they should bother. i mean -- >> giving or --? >> if they want to give they should give but the fact is they get criticized when they don't do enough, criticized when they do stuff and people say you're doing it for the pr value. why bother? i think i stole robert's idea. >> warren buffet saying in the great "times" article he would rather they not give away his money as a shareholder. he says companies shouldn't give away my money. by the way, video donors i believe are better than companies at giving away money. >> the second topic about the new york city airports, the three of them, newark, laguardia, jfk ranking very low in a survey of in airport
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amenities. >> yep. >> surprised? >> i used to live in singapore. they had orchid gardens, koi ponds, best food in the world. new york you can't get a good sandwich or burger, maybe some ketchup. >> and they don't take off on time or land on time either. >> bad on time records at all three basically. laguardia is to me the least appealing of the three. >> terrible. >> we all pay a tax every time we fly on a plane but it goes to congress and they divvy that money across the country so it goes to airports that don't have necessarily nearly as many travelers. >> i like newark. they got all kinds of shopping. >> the lines are horrendous. >> all right. move on, mcdonald's is apparently ending a partial 40-year partnership with heinz after heinz hired burger king's former ceo. we thought as taste test was in order. we have three different -- what did you say? two minutes to eat all these french fries. we're going to see which -- >> trying which we like. >> i maintained i could tell heinz because heinz is my ketchup of choice.
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>> really? >> i did. let's go. everybody taste. >> which way. >> i think we've got heinz, hunts and america's choice. >> little spicy. >> tangy. >> some undertones of vanilla, little bit of leather under there. >> leather. >> i like how thick this one is. >> i don't know which one is heinz. we're going to find out. >> good balance. sweeter though. >> right. >> more tangy. >> like ice cream. that's ice cream there. >> denser. >> that has a vinegary -- >> let's go. >> tangy. more of a terra with that one. i would pair that with a nice orida fry. >> this is my favorite. i like the texture the best. >> i like -- this is like ice cream. >> which one do you think is heinz? >> way too sweet. >> i have no idea. >> which is heinz? >> i would say that is heinz. >> i think this is heinz. >> i think this one is heinz. let's find out. this one is hunts. >> all right. >> my favorite. >> vinegary.
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tangy. this one is heinz! >> oh, my. >> nobody got it. >> nobody got it. >> what's this one? >> america's choice. >> america's choice. >> i can buy generic. >> michele's choice too and "power lunch" choice. >> wow. >> there we go. how do you like that? seems like mcdonald's is sort of saying we're going to scale back our partnership with heinz, because they hired somebody who used to work at burger king? >> no. makes total sense to me. burger king controlled by this brazilian investor group that controls heinz. it's the ketchup wars all over again. >> it's only the two markets in the u.s. and abroad. kind of like -- >> that is sugary. >> this is the rc cola of catch church. >> people like it more but wouldn't buy it. >> we will leave it right there. finish up the cold fries but no such thing as bad fry. three winners in today's trading when we come back.
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what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ all right. take a look at the markets before we turn it over to "street signs." the dow jones industrial average is up 18 points on the trading session. s&p at a new record high, hit this hour. up 3.75 at 1763.01.
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the nasdaq is negative. three winners, bristol myers up almost 6%, we have a 9% gain in jc penney and cf industries up 5% on the trading session. ty? >> come on home, lot of ketchup waiting for you. >> you got it. >> that will do it for "power lunch." >> "street signs" begins right now. see you tomorrow. ♪ new york city is the place because markets still taking a walk on the wild side as they move higher again. welcome. tribute to lou reed. your hot stories what, if anything, can stop this stock rally. we're going to dig out so-called ugly duckling stocks that unloved but shouldn't be. why american carmakers are singing a sad song today and what mcdonald's did, mandy, which might be one of the dumbest things we've heard in a while. >> it is. le